Up yours

canada modified modified

“Basically,” he was saying, “you’re all insane.”

It’s not that he comes from a cheap place. The average house listed in urban Boston these days is north of a million dollars, and the median selling price in the wider metro area is $439,000. House prices have risen 12.7% in the past year, part of the massive recovery from the bottom five years ago when real estate was 30% cheaper.

But Boston – or anywhere else in North America – doesn’t have 22,000 new, unsold condos on the market with 55,000 more under construction, as does Toronto. In the US people buy homes and lock in a cheap mortgage rate for 30 years, then deduct the interest (and property taxes) from their employment income. “Your five-year mortgage renewal cycle is a disaster,” he said, gazing out my 53rd floor window over a carpet of real estate desire. “It’s going to bite hard.”

(By the way, looks like a new round of mortgage rate increases starts Tuesday. BeeMo is adding 10 basis points to its 5-year fixed (5.44%) and VRM (3.1%) in anticipation of the US Fed starting its tapering in 10 weeks’ time. Last Friday’s boffo job numbers in the States increased the odds stimulus will be curtailed and bond market yields rising. Are you ready?)

And nowhere in the US is there such a forest of cranes standing over the concrete elevator shafts and glassy curtain walls that will bring yet more condo towers. “I went for dinner last night downtown,” he continued. “Hadn’t been to this city in six months, and when I arrived at the same restaurant, there were four new buildings. You should worry. This is elevated risk.”

He’s in Canada working with some boys on Bay Street on a new hedge fund which will short our housing market. Short Canada, actually. “This is not an easy thing to construct,” he adds, “but it’s coming along nicely. We’ll have some stock to short, but mostly this is about the economy.”

The hedge fund manager reveals that many look north and see “a sure thing” in a real estate market that’ll end in tears or, better yet, profits. How could it be otherwise, he asks? Housing and related activities now form more of the Canadian economy than was the case in pre-bankruptcy California during that state’s housing orgy. Everybody knows interest rates will eventually normalize, and while Massachusetts homeowners are safely ensconced in their lifetime loans, people in Calgary and Etobicoke will be wondering what hit them upon renewal.

“This isn’t a bank play,” he says, “since you’ve really only got five of them and CMHC’s sucked off a lot of risk. But it is a play on the currency.”

The logic is simple: delusional Canadians have borrowed their pucks off getting mortgages to buy houses at ridiculous prices, creating artificial demand in a sector which now forms a dangerous part of the whole economy. Once the correction starts, houses decline, the wealth effect wears off abruptly and people retrench. Consumer spending tanks, the construction sector craters and a country which decided to concentrate on condos, not exports, gets whacked. So, down goes the loonie. “That,” says the hedger, “looks like a no-brainer.”

So, he reads this blog. “Can’t believe how many posting there are in denial,” he offers. “The situation here is actually far worse than it was in the US in 2006 or 2007. We just find it hard to believe people in Canada watched what happened to us five years ago and figured they were immune.”

Dumb American. Does he not realize we’re special? That it’s different here? That people in Vancouver can continuously spend more than they earn to support a bungalow, or that bug sanctuaries in Leslieville will soon be worth millions? How can anyone not know that people from around the world are desperate to hang in Winnipeg where it’s minus forty, or that wealthy industrialists in Guangdong dream of living down the street from a Boston Pizza on a flood plain Richmond?

We rose to part. He promised to send me details of his Canada Death Watch Delusional Numbnuts hedge fund (that may not be the exact name) once it’s launched and available to retail investors. “This is going to be highly interesting,” he said, like a guy with a doomed ant farm, “and I’ll be watching your stuff.

“It’s not a matter of if, just when.”

220 comments ↓

#1 Yaroslav on 12.09.13 at 9:21 pm

Thanks for posting the cat photo the other day Garth.

#2 Babblemaster on 12.09.13 at 9:21 pm

“Everybody knows interest rates will eventually normalize, and while Massachusetts homeowners are safely ensconced in their lifetime loans, people in Calgary and Etobicoke will be wondering what hit them upon renewal.”

—————————————————-

Same old song for the last 5 years.

I’ll grant you that this hedge fund manager probably knows more than me, but I really don’t see higher rates. Only if the economy gets a lot better or inflation goies through the roof. There’s no indication that either is going to happen.

Ever hear of the bond market, son? — Garth

#3 Jas G on 12.09.13 at 9:23 pm

We are so doomed. Lol.

#4 Porsche on 12.09.13 at 9:24 pm

2014 Ski-Doo MX Z TNT

But what a ride !!!

#5 ritchie on 12.09.13 at 9:24 pm

There will not be a taper in ten weeks time because (1) the unemployment rate has not hit the Fed’s target of 6.5% that they have set in order to begin withdrawal (2) inflation is well below the Fed’s target (3) Yellen is even more dovish than Bernanke and believes that monetary accommodation is required until unemployment comes down.

#6 Ripped on 12.09.13 at 9:25 pm

I remember when they raised rates to protect a falling Loonie.

#7 r on 12.09.13 at 9:26 pm

How VRM going up

#8 delusional on 12.09.13 at 9:26 pm

Keep us posted. I will buy that fund

#9 ILoveCharts on 12.09.13 at 9:27 pm

So which city will have it worst? Vancouver or Toronto?

#10 Smoking Man on 12.09.13 at 9:28 pm

He’s in Canada working with some boys on Bay Street on a new hedge fund which will short our housing market.
………………………………….

Has he considered the herd here, stubborn little shits.

I’m not even going to get into it. Done it so many times before. 416 SFH golden. Condo’s in 416 and McMansions in Brampton TOAST, High taxes and soon to be hydro rates higher than mortgage payments

Real estate market is the leased of my worries, my wee bungalow could go to zero I won’t break a sweat.

It’s the Tree Huggers. I’ve been getting into it. Researching.

My god are they a scary lot, to make matters worse the Libs, NDP and the young believe in global warming scam.

And see nothing wrong with taxing, now and retroactively to oblivion, it’s actually there goal.

Off shore your loot fellow smoking men.

#11 gogo on 12.09.13 at 9:29 pm

Very interesting who they are shorting? Can’t do it with the banks. Genworth?

#12 Form Man on 12.09.13 at 9:30 pm

#3 I love charts

Toronto

#13 BlackScholes on 12.09.13 at 9:34 pm

Let’s hear who this hedge fund manager is Garth. To go short on bonds is to expect interest rates to tick up. How big a position does he have? What’s the size of his fund? Are we talking a miniscule $200MM AUM fund? Style of fund? Macro? Don’t view rates moving up anytime soon.

#14 heineken on 12.09.13 at 9:37 pm

the misinformation agents are in full swing again.

the usa economy will never ever stop tapering. its impossible. every stat that comes out of the usa is all bull crap. just lies and manipulation.

its still a good time to buy a home in the 416 area. free money at 3 to 5%. lock in for 10 years.
roll the dice!!!!

#15 Ripped on 12.09.13 at 9:38 pm

He’s in Canada working with some boys on Bay Street on a new hedge fund which will short our housing market.
———————————————————-
An inverse ETF ?

#16 Smoking Man on 12.09.13 at 9:41 pm

(By the way, looks like a new round of mortgage rate increases starts Tuesday. BeeMo is adding 10 basis points to its 5-year fixed (5.44%) and VRM (3.1%) in anticipation of the US Fed starting its tapering in 10 weeks’ time.
………………………………….

Ba hahahahah.

Food stamp rolls and folks going on disability keeps rising.

No Tapper………..

Machine is looking at what just happened in nice Singapore.

BMO is going to look dumb when no one else does it.

Yileds

http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/

#17 JSBertram on 12.09.13 at 9:41 pm

just when you thought the Rob Ford has saga gone away …

Bungalow Linked to The Ford Crack Scandal Drops Its Price
http://toronto.curbed.com/archives/2013/12/09/bungalow-linked-to-the-ford-crack-scandal-drops-its-price-now-700k.php

Just the place to store your signed RobFord Bobblehead.

#18 greaterfool2013 on 12.09.13 at 9:46 pm

Guess who?

” Man, I see the strongest and smartest men who’ve ever lived. I see all this potential, and I see squandering. God damn it, an entire generation pumping gas, waiting tables; slaves with white collars. Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need. We’re the middle children of history, man. No purpose or place. We have no Great War. No Great Depression. Our Great War’s a spiritual war… our Great Depression is our lives. We’ve all been raised on television to believe that one day we’d all be millionaires, and movie gods, and rock stars. But we won’t. And we’re slowly learning that fact. And we’re very, very pissed off.”

Fight Club. Now, get a job. — Garth

#19 greaterfool2013 on 12.09.13 at 9:46 pm

DELETED

#20 pinstripe on 12.09.13 at 9:48 pm

There will be no tapering of QE.

Interest rates have no choice but stay low for a long time.

House prices will continue the upward trend.

Debt is the primary hope.

Govts at all levels are dependent on debt.

The market is RIGGED.

#21 Ralph Cramdown on 12.09.13 at 9:50 pm

It certainly isn’t like your acquaintance is out front of the trend (no disrespect; it’s often best to wait until a trend is established).

When you look at the biggest short interests on the US exchanges, Canadian bank stocks are there showing the flag. These league tables are measured in terms of “days to cover” or the number of days of trading at an average day’s volume that shorts would have to be all of the buyers of on that exchange to cover their positions. Since most of the volume is on the TSX, all this really says is that a lot of American money is bearish on Canadian banks.

I’ve been way underweight Canadian banks this year (nothing except one leveraged play since the Spring) and have been suffering for it. So it goes.

Garth, please give a brief pointer to the fund when available. Not like it’s hard to short the market, but we’re curious.

Shorting the banks is a fool move. — Garth

#22 Smoking Man on 12.09.13 at 9:52 pm

#17 JSBertram on 12.09.13 at 9:41 pm
just when you thought the Rob Ford has saga gone away …

Bungalow Linked to The Ford Crack Scandal Drops Its Price
http://toronto.curbed.com/archives/2013/12/09/bungalow-linked-to-the-ford-crack-scandal-drops-its-price-now-700k.php

Just the place to store your signed RobFord Bobblehead.
………………………………………….

Always told you dogs, long branch south of lake shore.

Now Get this I went to the open house, completely renovated, The agent said if they don’t sell it they will just let their son live there.

Ha. Welcome to the hood Sandro …. I will Show you around when you get out of the slammer.

Introduce you to the toothless guy.

#23 Andrewski on 12.09.13 at 9:53 pm

Was it Mr. Mohan who paid you a visit Garth?

http://www.theglobeandmail.com/globe-investor/meet-the-man-whos-selling-canada-short/article11585150/

Nope. Smarter. — Garth

#24 Ralph Cramdown on 12.09.13 at 9:55 pm

#19 pinstripe — “The market is RIGGED.”

A common sentiment. But I find it meaningless. If I choose to buy BCE at 5% and hold it for 30 years, should I be angry that I should have gotten 5.1%? 6%? If I hold for 30 years, who’s benefiting on the other side of my trade, and by how much?

#25 Manna from heaven on 12.09.13 at 10:01 pm

Hi Garth,

First time poster, long time watcher. Was turned onto your blog from Vancouver Condo Info but remember you from your Parliament days.

Live here in “the best place on earth” and am terribly annoyed at how long this housing boom/bubble is taking to play out. However, I may as well profit from it so please shoot me an e-mail when retailers are able to participate in this fund. Would be willing to put 5% or 25k of my liquid assets into it.

Cheers!

#26 mark on 12.09.13 at 10:01 pm

Regional markets always seem to be the plaything of someone with deeper pockets

http://www.idiottax.net/2013/12/no-country-for-new-profits.html

#27 Daisy Mae on 12.09.13 at 10:03 pm

“We just find it hard to believe people in Canada watched what happened to us five years ago and figured they were immune.”

**************************

Absolutely boggles the mind — just how STUPID our government is, and how STUPID Canadians are….believing the government.

#28 Paul at No Pension Will Travel on 12.09.13 at 10:04 pm

Buy 100 CDWDN fund at market.

#29 souvereigninternational on 12.09.13 at 10:06 pm

“It’s not that he comes from a cheap place. The average house listed in urban Boston these days is north of a million dollars, and the median selling price in the wider metro area is $439,000.”
– here is a listing in Framingham, MA for 419K. It is 34 km from downtown Boston and maybe 45 min. drive. If you notice you can’t see neighbours houses, because the lot is more than half acre and it abutts conservation land. The listing has surprisingly more than one picture. Good luck finding comparable property for any price in GTA. Here we drive to Whitby for an Hr. + to live in overcrowded subdivision with miniscule lots with roofs of detached houses almost touching. How “cosy” and socially/environmentally forward we are. We are not americans we are not afraid of our neighbours being close, we are friendly Canadians.

http://www.trulia.com/property/1061346614-10-Gates-St-Framingham-MA-01702

#30 T.O. Bubble Boy on 12.09.13 at 10:06 pm

Bitcoin $965!
http://bitcointicker.co/

I love tulips!

#31 TurnerNation on 12.09.13 at 10:09 pm

We have a 7 foot tall bald dude to sic on this yank!

Today’s pic: short bomber B. Or FIRE industry on ice?

I see Mr. Kitco in the news. CRA melting his halo. Those goldnuts.

#32 Daisy Mae on 12.09.13 at 10:10 pm

#1 Yaroslav on 12.09.13 at 9:21 pm
Thanks for posting the cat photo the other day Garth.

**********************

And…after such a powerful blog THIS is the first comment?

#33 greaterfool2013 on 12.09.13 at 10:10 pm

Here’s a riddle for all to solve.

” If a PE ratio is 16, is that expensive, fair value, or cheap?

REALLY? Who says so?

#34 AK on 12.09.13 at 10:10 pm

I am not surprised. I believe that the busch league Loonie is heading down .80 cents by the end of 2014.

Who knows what the hell will after that.

#35 AK on 12.09.13 at 10:11 pm

Who knows what the hell will happen after that.

#36 Notta Sheeple on 12.09.13 at 10:12 pm

Wondering if Harper will be playing piano while Rome burns.

Or, perhaps he’ll just spend it as another ‘buying opportunity’.

#37 Smoking Man on 12.09.13 at 10:13 pm

#27 Daisy Mae on 12.09.13 at 10:03 pm“We just find it hard to believe people in Canada watched what happened to us five years ago and figured they were immune.”

**************************

Absolutely boggles the mind — just how STUPID our government is, and how STUPID Canadians are….believing the government.
………….

Doesn’t boggle my mind. It’s simple, just to talk to the herd in a calm firm authitive voice just like teachers you oun them. Most have at mim 12 years of obedience training.

Cake walk.

#38 Franco on 12.09.13 at 10:13 pm

#27 — Well Daisy Mae, many have called the demise of the Canadian RE market and so far none have come true. I have been steadily predicting the RE Market to stay strong for the last five years and I have been consistently correct. I now predict a slight correction, but only slight with a sideways RE market in Canada for a short while. Canada is growing and not shrinking.

#39 Larry Laffer on 12.09.13 at 10:16 pm

@Heineken #14
Just curious: what is your proposed causal link between a neverending QE and seing that a house in the 416 is a wise investment? Inflation?

Seems to me that if all stats are crap, so should the canadian housing market.

#40 A Yank in BC on 12.09.13 at 10:19 pm

Garth,
Since you sorta brought up the subject.. why is it that Canadians don’t have the alternative choice of having 15,20, or 30 year fixed interest-rate home loans as is common in the US? Is it because the Big-Five wouldn’t like it?

Blame the Bank Act, not the banks. — Garth

#41 eddy on 12.09.13 at 10:22 pm

Listen to you pathetic children crying that prices in 416 are dropping. People, it’s two weeks before Christmas, a 2 bdrm bungie in Mimico for 700k is no one’s idea of primo. The good stuff gets multiple offers and sells.
In a month it’s the spring market and all the multiple offer losers from Leslieville and Pape Danforth and Don Mills, Kingsway, the beach, Islington Bloor,Leaside, etc will be back to get in line and try again.

Don’t forget ‘we’re holding off offers”

Don’t forget to ‘register’

Don’t forget ‘certified cheques’ with the offer

“Please Mr. Seller, I’m not worthy, but take my offer of 150K over list, no conditions, with 100K deposit, herewith, certified…grovel, lick ,kiss.. we’ve fallen in love with upper upper beach”

Instead of crying on this blog why not do something useful and call your councilor and tell them to scrap the 416 land transfer tax, if you even live in 416

#42 souvereigninternational on 12.09.13 at 10:24 pm

“In the US people buy homes and lock in a cheap mortgage rate for 30 years, then deduct the interest (and property taxes) from their employment income. “Your five-year mortgage renewal cycle is a disaster,” he said”

– I have been saying this for years. Why would one take a huge loan with interest rate uncertain after 1/5th of the term. Insanity. Would we shop for cars the same way. This type of contract should only be looked at if you have enough liqidity/ability to pay the whole loan after five years. Furthermore if the loan has a collateral one should be able to return that collateral to wipe the loan clean. If the lender (bank) overvalued such collateral they should suffer the consequencies of their bad business decision. So called “Jingle Mail” is an essential part of the free market. There should be no moral dilemma there just fair execution of contract laws unencumbered by gov. mingling.

#43 Retired Boomer - WI on 12.09.13 at 10:30 pm

Yeah, I’ll take a piece of that fund, the “Canada Death Watch Delusional Numbnuts Hedge Fund”

We have all talked about the dangers to People of DEBT on a binge. Well, may as well make a buck as the Loonie Tunes up for the roast.

Gee, it did not have to be this way, you daw the delusional boobs right here in the United Snakes in the mid-2000’s.
Doesn’t watching history make one want to write their own quite differently? Apparently not.

Taper? Yes, maybe not full tilt but, as least a “token taper” in 2014. No Tellin with Yellen quite yet. Besides we run out of credit in Jan-Feb again, the tea partiers will be Sabre rattling until they get…whatever… Bread & Circuses

#44 Gg on 12.09.13 at 10:30 pm

Much more at play than real estate when figuring out the loonie. It works in relation to outside influence too.

#45 Retired Boomer - WI on 12.09.13 at 10:31 pm

oops spell check takes a dump “daw” = “saw”

#46 Bubu on 12.09.13 at 10:36 pm

In Edmonton ( North of the city) you can buy a house for $1,1M:
http://edmonton.kijiji.ca/c-real-estate-houses-for-sale-LUXURY-WALK-OUT-BUNGALOW-STURGEON-COUNTY-ACREAGE-LUXURY-ESTATES-W0QQAdIdZ550709034

or rent it for $2k:

http://edmonton.kijiji.ca/c-real-estate-houses-for-sale-LUXURY-HOME-FOR-RENT-STURGEON-COUNTY-LUXURY-ESTATES-W0QQAdIdZ550708475

Really? 2% taxes at full rate not counting the city taxes?

#47 not 1st on 12.09.13 at 10:37 pm

“Your five-year mortgage renewal cycle is a disaster”
—-

You mean just like the ARM cycle in the U.S.A has been?

#48 heineken on 12.09.13 at 10:39 pm

re #39 Larry Laffer on 12.09.13 at 10:16 pm
purchasing a home (not condo) in old-Toronto is a no brainer. the basic supply and demand equation always favours the seller (in most cases). there are plenty of testimonials on this site who promote this line of thinking.
its expensive to get in but when its your time to sell, it still is expensive. the numbers don’t lie.

#49 not 1st on 12.09.13 at 10:39 pm

Shorting Toronto condos, yup, no brainer.

But that ol boy better do some better research because our dropping loonie is not a liability, it actually strengthens our export position. Its our next round of stimulus for whatever rough patch awaits us.

Our lumber and construction materials will soon be pouring over the border when the U.S. roars back to life. This guy is out of his element.

#50 souvereigninternational on 12.09.13 at 10:42 pm

#10 Smoking Man on 12.09.13 at 9:28 pm wrote

He’s in Canada working with some boys on Bay Street on a new hedge fund which will short our housing market.
………………………………….

Has he considered the herd here, stubborn little shits.

I’m not even going to get into it. Done it so many times before. 416 SFH golden. Condo’s in 416 and McMansions in Brampton TOAST, High taxes and soon to be hydro rates higher than mortgage payments

Real estate market is the leased of my worries, my wee bungalow could go to zero I won’t break a sweat.

It’s the Tree Huggers. I’ve been getting into it. Researching.

My god are they a scary lot, to make matters worse the Libs, NDP and the young believe in global warming scam.

And see nothing wrong with taxing, now and retroactively to oblivion, it’s actually there goal.

Off shore your loot fellow smoking men.”

Have you been talking too much with the sheep lately?
I agree with all you wrote above. It so makes you want to leave. What are your destinations of choice? I am considering Cayman Is, BVI, Urugway and particularly Chile myself in the future.

#51 Nemesis on 12.09.13 at 10:43 pm

Shocking, AuldPol!… UtterlyShocking!

Talk about, “UpYours”. Have you lost your mind?…

Are you contemplating TransGender SurgicalEnhancements? Got a OneWay to Международный Аэропорт? Planning on wearing OrangeAsTheNewBlack @ Guantanamo?

What were you thinking? ClandestineFieldTests of our LatestPrototype are DECIDEDLY NOT in the PublicDomain.

You do realize that I can only cover for you for so long….

[CPC* BC] – Ottawa testing $620K stealth snowmobile for Arctic

http://www.cbc.ca/news/canada/north/ottawa-testing-620k-stealth-snowmobile-for-arctic-1.1377270

#52 bentoverandpayingmytaxes on 12.09.13 at 10:44 pm

Your ‘hedge fund operator’ sounds like typical blowhard looking for a sucker to ‘get in on the ground floor’. Whats to short? Majority of construction projects are one off LLC joint venture numbered companies with no exposure to public markets. None of the loans are uninsured….the presale qualifiers have the buyers/flippers on the hook for any promised proceeds. You can’t profit from a fall in residential housing when the vast majority of speculation is done by offshore interests…both residential a ( 60% Westside buyers are PRC) and commercial…..the three /Malaysian cash ( Trump Towers), Hong Kong ( Shangrila and Mainland China ( False Creek and Coal Harbour) funded. The overhang has been farmed out to a vast collection of insurance companies…none of which are based in Canada….but in the US. None of the 5 banks have any exposure to mortgages…..and CMHC doesn’t trade. TD, ROYAL and BNS all have a greater percentage of profits from US and international investments than Canadian. Theres no pool of condo’s in a REIT to short…its all owned by individual idiots who can choose not to sell.

I repeat…’short what?’ Is your guy a hopeful currency trader looking to use you to goose a short on public misdirection? Those kind of rumors are illegal in the US….is your hedge guy just a boiler room shyster? Doesn’t seem to me that he knows a heck of a lot about Canadian financial infrastructure.

#53 Strawman on 12.09.13 at 10:47 pm

Its QE to infinity for the Fed , cause you cant taper a Ponzi.
Dollar is toast .US is in full on collapse …..Detroit is just the beginning more to come .

#54 Canadian Watchdog on 12.09.13 at 10:50 pm

Nothing new here. This is a classic promotional hedge fund prowl to get the little guys (asset managers) in the market in order to increase liquidity for the smart money to cash out. As the latest COT data shows: leveraged money (hedge funds) are moving from net short to net long; along with dealers (banks) increasing their net long positions; while asset managers (who don't get inside info) are confused and baffled by the Fed's taper BS, leaving them undecided on which way to trade.

If you want to know which way the CAD is likely to move, watch oil prices and how high the BoC's bond asset purchase program goes.

#55 Canuckistan on 12.09.13 at 10:53 pm

Garth,

I wrote this (http://vancouvercondo.info/2009/12/banker-bubble-talk-bundle.html#comment-60086) up 4 years ago. The only thing it appears I had underestimated was the time to interest rate normalization in my original forecast. Who would have thought the U.S. would take such a long time to step off the precipice? I just looked at the U-6 unemployment rate. The last time it had been at 13.2% as of November 2013 in the last 20 years was in November 2013…Nothing is really going to happen with the housing market until the rates start ticking up in earnest. Your buddy is right this is a play on the currency as it always was the case.

#56 NRI13 on 12.09.13 at 10:55 pm

Great blog as always. Garth, you mentioned a few blogs earlier about a new blog/topic to be addresses specifically fortress…is that blog on its way? thank you

#57 greaterfool2013 on 12.09.13 at 10:55 pm

“Smoking Man”

“Has he considered the herd here, stubborn little shits.”

YOU DON’T SAY!

No different than say “prohibition?”. Who brought that on again? Oh yeah, google it.
What about all the pinkos?
What about all the idiot [email protected]?
What about your idiot BIL?
…idiot Boomer MOM/DAD?
What about the 49% of “international buyers” that bought all housing in Canada in the first half of the year?

Yeah, that’s right. The “Herd”. You know, the % of people who agree with “X” “Y” or “Z”

It’s hot until it’s not.

#58 Shawn on 12.09.13 at 10:56 pm

WHY NO 25 YEAR LOCKED IN RATE IN CANADA?

A Yank in BC said:

why is it that Canadians don’t have the alternative choice of having 15,20, or 30 year fixed interest-rate home loans as is common in the US? Is it because the Big-Five wouldn’t like it?

Blame the Bank Act, not the banks. — Garth

***************************************

Good question Yank.

Okay, fair enough Garth had pointed out before that the bank act requires mortgages to become open after five years.

But in the U.S they appear to be essentially always open. One pays a fee to renegotiate to a new mortgage. Americans do NOT pay a big interest rate differential. (Which would have been MASSIVE on 30 year locked mortgages as rates fell.)

So not sure the Bank Act explain this. The open after 5 is not sufficient explanation.

In the U.S. investors take the risk of the mortgage coming open and being paid off early. This is done through securitization. Or Fannie Freddy take the risk, I don’t know.

This topic has been explored on this blog before. I have never seen a rational answer as to how Americas can do it and Canada can’t.

I know the banks in the U.S. don’t lose a dime when a mortgage is renegotiated down to a lower rate. They earn a fee. They love it. I have owned Wells Fargo for several years and I read their reports closely.

I have been told the investment community in Canada just won’t invest in securitization like in the U.S. That’s not rational as investors are pretty much the same.

CMHA and the government have interfered in the market and do not allow banks to securitize say a 25 year locked in mortgage. They simply forbid it. I don’t think that is Bank Act as such but it is regulations some place. Maybe this is prudent to forbid this, I simply have not seen a good answer.

The man who rides in and changes the Bank Act and whatever else needs to change to give Canadians the locked in rates that the U.S. has WITH the flexibility to pay off early would be national here if rates rise and a lot of people are protected because the market was allowed to operate.

Those few people who took Garth’s advise and grabbed the good ten year locked in rates that briefly existed last year will so thankful for that if rates rise.

Have we no heros?

Must I open my own mortgage company and do this?

#59 conan on 12.09.13 at 10:57 pm

So I see a cat series here. Yesterday was wet pool cat and today is burning arctic cat . Should anyone be reading between the lines here?

#60 Canuckistan on 12.09.13 at 10:57 pm

Wrote this too: http://vancouvercondo.info/2009/12/banker-bubble-talk-bundle.html#comment-60114

#61 GoldnSilver on 12.09.13 at 10:57 pm

I would not exactly call the USA a recovery in Real Estate. Large hedge funds and affluent cash Buyers are buying and speculating. Looking for a quick profit two years out. Middle class Americans and families are not the buyers and new mortgage applications are in the tank. After 2015, the wheels will once again fall off the wagon and all of North America will be in a Real Estae decline for 17 years.
http://video.foxbusiness.com/v/2893509883001/new-home-sales-heat-up/?playlist_id=1866680862001

#62 Bottoms_Up on 12.09.13 at 10:57 pm

#6 Ripped on 12.09.13 at 9:25 pm
———————————–
Won’t happen this time because of how indebted everyone is. A falling loonie is here to stay. But shorting the loonie is not the same as shorting the real estate market….

#63 Bottoms_Up on 12.09.13 at 11:03 pm

#33 greaterfool2013 on 12.09.13 at 10:10 pm
————————————————
History, trends, averages and relativeness say so.

#64 Randy Macho Man Savage on 12.09.13 at 11:04 pm

Heard an ad the other day on the radio about a jeweler that will sell you diamonds with a guarantee to buy them back in a year’s time at a 5% premium. I have no interest in buying overpriced (and in my opinion, worthless) objects whose main selling feature being that they are a little shinier than glass, but am wondering how this might play out. Do you think they will honor their policy, or just try and move a lot of product, close up shop, and reopen as a different company?

http://www.omnijewelcrafters.com/Investing_Opportunity

#65 Chickenlittle on 12.09.13 at 11:04 pm

Man oh man! I read some of the posts from last night. Politics really do bring out the best in all of us, don’t they?
#64 Herb:
“Ah, Justin Trudeau, the Neandercons are crying havoc and have unslipped the trolls of war. You must be dangerous to their cause indeed!”
Huh?!? That’s Mormon logic: if I am being persecuted then that means I am right and am doing the Lord’s will. That kind of silly logic works in politics too, apparently. If people don’t like you, then you must be a threat. It could be that he’s an idiot plain and simple.

I also find it funny that Garth (from what I read) never considered joining the NDP.

That PROVES there are no good alternatives in Canadian politics.

#66 45north on 12.09.13 at 11:06 pm

We just find it hard to believe people in Canada watched what happened to us five years ago and figured they were immune.

I still find it hard to believe.

Flaherty has the tiger by the tail. If he hangs on he’s in trouble, if he lets go he’s dead.

#67 Mark on 12.09.13 at 11:07 pm

“Down goes the loonie” — has the guy not seen what happened in the USA during their debt deflation? The USD$ went insane as people were no longer shorting the currency. After all, every time someone takes out a mortgage to buy a house, they’re effectively shorting the Canadian dollar.

When this slows/stops/comes to a crawl, watch out, the CAD$ will be on a tear. The hedgies thinking that the CAD$ will underperform in such an environment are just asking to have their heads ripped off.

#68 Bottoms_Up on 12.09.13 at 11:07 pm

#32 Daisy Mae on 12.09.13 at 10:10 pm
—————————————
Some people will continue to be crazy and put felines and canines above humans. Post a picture of self-immolation (similar to today’s picture), and we likely won’t hear anything about cruelty to humans or promoting self mutilation or psycho behaviour. But put up a picture of a wet cat and watch out!!!!

#69 Ralph Cramdown on 12.09.13 at 11:10 pm

#33 greaterfool2013 — ” If a PE ratio is 16, is that expensive, fair value, or cheap? REALLY? Who says so?”

It’s fair value, according to the market. You as an individual with money or the thing in question might disagree, but there it is. If you want to guess the future E and the future P/E that the market will assign, feel free. If you want to buy an index fund and accept the market’s judgement, that’s an option too. But it’s the combination of you and everyone else who’s playing that sets the price.

#70 Renter's Revenge! on 12.09.13 at 11:11 pm

Woo hoo! Go Canada!

We’re finally getting the international recognition we deserve!

Oh wait…

#71 SofaKing on 12.09.13 at 11:16 pm

@ smokin’man

Hey numbnutz, it’s no longer called global warming. Get with the program.

#72 I'll be Bob on 12.09.13 at 11:23 pm

HOW TO SHORT CANADA?

The Banks – maybe not much growth, but they’re not going to suffer.

The Loonie – it might be vulnerable to world commodity prices, but that’s a risky bet. Maybe there will be a little blip IF tapering starts. But a mild housing correction won’t begin for a couple of years, so good luck.

Tim Hortons – don’t think so.

Rona – really?

Retail – most is American owned.

Oil, gas & gold companies – I doubt they can get lower.
————————————————
Hard to make money on this trade. But it’s a pretty safe bet to lose less – don’t buy a condo in 416.

#73 Brian Ripley on 12.09.13 at 11:29 pm

#9 “So which city will have it worst? Vancouver or Toronto?”

Judging by my comparison chart http://www.chpc.biz/compare-toronto–vancouver.html
I would say Vancouver will have a greater dollar correction and probably a longer time spent correcting.
The GTA has the advantage of population; more than twice metro Vancouver. That population base means the Feds will consider it a too big to fail jurisdiction (too big to ignore the votes) and tax revenues will flow into southern Ontario.

#74 Tipler on 12.09.13 at 11:31 pm

No Correction until 2015 at least !!!

In my opinion the conservatives will do whatever it takes to make sure there is no correction in real estate as that could really hurt their chances of being re-elected. Downturn in real estate would really hurt them in the pools and they just can’t afford that unless they want to have a minority government.

#75 erick on 12.09.13 at 11:34 pm

Well, this doesn’t sound that bad after all:
RE going down, CAD $ going down, then exports going up, and Canada finally going back to producing and selling real stuff – replacing jobs based on the dreams of people expecting to make easy money with condos, with jobs bringing a more sustainable wealth to this country (ever heard how there has never been a RE bubble in Germany and how most people are driving nice cars (that they have probably paid cash) and spending their vacations traveling all around the world …)

#76 Ahead of the Curve on 12.09.13 at 11:38 pm

Shorting Canada?
Please tell me that’s a joke. I hope your bud won’t bet the mortgage so to speak… In so long as we have the resources every other country dreams they had, he’s betting against the wrong country!

#77 Smoking Man on 12.09.13 at 11:44 pm

#71 SofaKing on 12.09.13 at 11:16 pm

Hey numbnutz, it’s no longer called global warming. Get with the program.
…….

Finally I out a tree hugger,thought I lost my touch, of course it’s not, cause it’s getting f-n colder.

How did you get so brain washed, let’s have a dialog, please don’t run away like a girl.

#78 -=jwk=- on 12.09.13 at 11:44 pm

@ #54
the presale qualifiers have the buyers/flippers on the hook for any promised proceeds

Ha ha. The pre-sales in USA were MORE strict than here, and those condos still collapsed. Buyers with 5k in the game will walk when they can’t close the financing. Good luck to the developers when they find the same buyer bought units in 3-4 other buildings and walked from them all. They are fighting for scraps. Heck they don’t even have owner occupancy tests up here! Cant get a home loan for a condo in (most of) the USA unless building is 70% owner occupied. less than that you need an investment grade loan – 25% down minimum and add 3% to your rate…

pre sales are worth ZERO when the SHTF…

#79 Brad Blakley on 12.09.13 at 11:44 pm

I hope you post the name of that hedge fund in the future which will be available to retail investors. I really want a piece of that fund. Best thing that I have heard in years.

#80 Julia on 12.09.13 at 11:46 pm

#18 greaterfool2013 on 12.09.13 at 9:46 pm

Just don’t forget the first two rules!

#81 Mister Obvious on 12.09.13 at 11:48 pm

#38 Franco

“… many have called the demise of the Canadian RE market and so far none have come true.”
—————————–

No so. For some, the demise is already quite real.

I know one individual who hung on to a Vancouver townhouse too long and took at least a $150K bath that could have been avoided had he sold in 2010.

Another couple I know in the greater Vancouver area were on the market for most of a year in 2012. Their agent told them getting the listed price would be a no brainer. Needless to say, they did not get offers anywhere near ‘their price’ and ended up staying put. Things haven’t improved since then.

There are at least two other couples I know of who could not sell for what they would have easily fetched three years ago. They have given up as well.

None were asking for the moon. They were all asking for what they were led to believe was “market value” by the RE cartel. None of them came close.

Perhaps that doesn’t constitute the ‘demise’ of Canadian real estate but it certainly was the demise of these folk’s plans.

#82 raisemyrent on 12.09.13 at 11:48 pm

I don’t even react to house horniness anymore.
My close friends, I might argue a bit with, battle “obvious” concepts like:
– realtors can predict the future
[email protected] is a financial advisor/economist
– This is Vancouver, real estate WILL always go up (foreigners, limited space, all the buildings going up, rent’s ever higher , historically it has never gone down, bla bla bla)

oh yeah my rent went down this year. the government allows a max based on various things and the landlord did less than half of that. FACT.

speaking of rent, what was I on about? I’m turning into Smoking Man. Must be the Pink Floyd (not drugs lol).
Rent: people here still want $1,600/m for a studio in “Yaletown” (mostly, not technically in yaletown). 1 yr lease. Credit Check (actual report from equifax), no pets, no parking, you pay the strata move-in fee (100-200), etc. Ugh.
I sometimes think water/mountain view, granite, lap pool, etc and salivate, but I really don’t feel like signing a lease for anything like that. Right now I’m month to month (equivalent of liquid?) on a flat that ticks all the essentials and comes in at a reasonable price a month.

It’s not fair, co-existing with all these lunatics… don’t we all deserve granite? haha

#83 Smoking Man on 12.09.13 at 11:54 pm

#74 Tipler on 12.09.13 at 11:31 pmIn my opinion the conservatives will do whatever it takes to make sure there is no correction in real estate as that could really hurt their chances of being re-elected. Downturn in real estate would really hurt them in the pools and they just can’t afford that unless they want to have a minority government.

……..

Why to go bright spark, you been going to the archives and learning from the smoking man.

Or was it a random fluke

#84 Tiger on 12.09.13 at 11:59 pm

66 45north!
A tiger does what ever it wants:)

#85 Godth on 12.10.13 at 12:00 am

What might happen when Quantitative Easing is Eased
http://www.youtube.com/watch?v=Kw3uXAQ4DwE&feature=c4-overview&list=UUM1ubsbE-tG9ru61mc3zX8A

#86 Nemesis on 12.10.13 at 12:05 am

LateBreakingAddendum:

Moments ago, ‘Nemesis’ was FiercelyCoerced… No, better make that, “Encouraged” to emphasize to you that the LeaderIllustration above does not depict current domestic production…

LooselySpeaking.

“Ahem.”

[G&M] – Ski-Doo maker moves Quebec jobs to Mexico

http://www.theglobeandmail.com/globe-investor/ski-doo-maker-moves-quebec-jobs-to-mexico/article4223154/

[NoteToSaltyDogz: I told them to forget about Li-ion and just BoltOn some SpeciallyModified WisconsinIron: e.g. DARPA’s Screamin’EagleBlueThunder®… but do you think they listened? Hah! Most of ‘them’ are still recovering from the ScopesMonkeyTrial. OhWoeIsUs.]

#87 recharts on 12.10.13 at 12:08 am

Kind of difficult season for realtors, that must be driving many of you to insanity like below.

#41 eddy on 12.09.13 at 10:22 pm
Listen to you pathetic children crying that prices in 416 are dropping. People, it’s two weeks before Christmas, a 2 bdrm bungie in Mimico for 700k is no one’s idea of primo. The good stuff gets multiple offers and sells.
In a month it’s the spring market and all the multiple offer losers from Leslieville and Pape Danforth and Don Mills, Kingsway, the beach, Islington Bloor,Leaside, etc will be back to get in line and try again.

Don’t forget ‘we’re holding off offers”

Don’t forget to ‘register’

Don’t forget ‘certified cheques’ with the offer

“Please Mr. Seller, I’m not worthy, but take my offer of 150K over list, no conditions, with 100K deposit, herewith, certified…grovel, lick ,kiss.. we’ve fallen in love with upper upper beach”

Instead of crying on this blog why not do something useful and call your councilor and tell them to scrap the 416 land transfer tax, if you even live in 416

#88 Obvious Truth on 12.10.13 at 12:10 am

Being short anything can be as painful as Garth’s pic tonight.

Sadly have felt pain of both. Machine hurt more.

Easier just to be long US as an expression of short canada. Can’t short tsx with all the commodity companies collecting US dollars. I’d still watch bank earnings and capital flows. For me it’s just a spectator sport for now. There are easier ways to make money.

Those tea party guys are still trying to conquer. We may have to deploy our financial equivalents to Brock and Tecumseh. Any ideas?

Alert the loyalists! And wait till the leafs get a hold of those bruins this year.

#89 Fed-up on 12.10.13 at 12:11 am

Heyyyyy my fellow canucks. I’ve got a great idea!!!

Since money has become sooooo cheap and accessible, why don’t pay the nice man at the grocery store or the sales staff at the clothing stores and car dealers 3 times more than what their stuff is worth and what it was selling for only 10 years ago? Makes sense doesn’t it?

#90 Pulp Faction on 12.10.13 at 12:14 am

Kitsault, BC – A lovely, pristine, sanctuary/retreat for artists and intellectuals to form a community of leading minds, living harmoniously in a remote part of BC wilderness, hours from anything civilized. A place where the smartest minds can relax and focus and think deep thoughts.

Crickets…………

Kitsault, BC – A beautiful wilderness area to raise a family and work at a proposed LNG plant, Refinery, Mining Claims, Oil and Gas Exploration, Heavy Industry, etc, etc. Right now, there is low paying work refinishing derelict old buildings.

This bitch has to pay off somehow ?

#91 Waterloo Resident on 12.10.13 at 12:18 am

Some people say that the Fed will soon start to TAPER, while others say that there will be Q.E. till INFINITY. Frankly, with the sad state of the European Economy, I’m beginning to think the later one.

#92 Smoking Man on 12.10.13 at 12:25 am

Sorry tipler I thought you where tiger.

Darn dyslexia, again.

Our well I’m in a fisty mood. Any takers my fever broke.

#93 HDJ on 12.10.13 at 12:44 am

“Garth,
Since you sorta brought up the subject.. why is it that Canadians don’t have the alternative choice of having 15,20, or 30 year fixed interest-rate home loans as is common in the US? Is it because the Big-Five wouldn’t like it?”

“Blame the Bank Act, not the banks.” — Garth

Seems to me those running our government and the banking system are indistinguishable. The government has given the banks what they want, and that’s how things will remain. Average Canadians, take a hike.

#94 Curious on 12.10.13 at 12:56 am

So if I want to buy something that does the opposite of “tanking”, in this soon to be disaster situation, what do I buy? Bonds? or just keep my money in cash and hope for those higher interest rates to roll around soon?

#95 Want to be Bob on 12.10.13 at 1:01 am

Canadian Confidence numbers are out and they’re up due to resilent Housing.

http://www.bloomberg.com/news/2013-12-09/canada-consumer-confidence-rises-on-resilient-housing.html

Poloz doesn’t see a problem with Canadian house prices. So what does he do? Talks down rate increases and make consumers believe that their is no debt problem. He’s choosing to try to stimulate exports and as a result he’ll blow up the housing market, the Canadian economy and thus the Conservative government.

Do what the OECD said last week Steve – raise rates a little now, before it’s too late.

#96 Doug on 12.10.13 at 1:26 am

Carney is looking pretty good right about now. At least he acknowledged a consumer debt crisis, an overheating Canadian housing market – especially in places, ushered in a few recent rate hikes and made the consumer feel uneasy about new house purchases because he kept insisting that the next move in rates would be up. Now he’s trying to curb England’s housing boom.

Mr. Poloz could learn a few tricks from him.

#97 Nemesis on 12.10.13 at 1:46 am

“I’m in a fisty mood. Any takers my fever broke.” – SM

Please tell me you meant, “feisty” SmokingMan.

I mean… like, SayItAin’tSo!

It’s WayTooLate these days, but OnceUponAtime… all the VeryBest FistyGents were habitués of Chelsea’s “RawHide”… [Cue: SFX “WhipLash” with Reverb/SMASHCUT: Bearded’Chaps’]

“Opened in 1979, the Rawhide is one of the last of a handful of old-school, unpretentious *** **** left in New York City. It is a survivor. But it won’t be for long. The building that houses it on 8th and 21st in Chelsea was sold a couple of years ago and, according to our tipster with inside connections, the new landlord has jacked up the rent, nearly doubling it from $15,000 to $27,000 a month. The Rawhide’s last day will be March 30.”

http://vanishingnewyork.blogspot.ca/2013/03/the-rawhide.html

JustTeasing.

The BitterIrony of ‘Gent’rification.

#98 No Name on 12.10.13 at 1:49 am

Real estate, rentals and leasing is over 12% of the Canadian Economy. Add about another 7% for construction. All in pretty close to one fifth of Canadian GDP is related to real estate

By choosing to be dovish on the rate bias, the BOC has chosen to crater close to 20% of the economy and bring down everything with it.

All this to TRY to stimulate manufacturing which represents about 11%.

This seems like a really risky bet when one sector (housing) is so close to the edge, all it needs is a liitle push. I think the BOC just gave it.

Flaherty & Poloz (hand picked by Flaherty) better reconsider their new message and heed the warnings of many top world economists and raise rates now.

#99 2CntsCdn on 12.10.13 at 2:19 am

75 erick
“Well, this doesn’t sound that bad after all:
RE going down, CAD $ going down, then exports going up, and Canada finally going back to producing and selling real stuff” (and having real value adding jobs).

You got it ….. this is the ONLY way to proceed from here. There is no other way out of this. Anything else is just a patch. There will be pain initially but a greater sustainable good will come out of it.

#100 Regretful on 12.10.13 at 2:22 am

Garth, how does one short Canada. Housing, dirty Albertan oil. This Country is going down. How do I short a Country. I missed out on housing, I missed out on BitCoin but I don’t want to miss out on shorting Canada. Maybe a separate post/rant you could provide

#101 Andrew Woburn on 12.10.13 at 2:29 am

#54 Canadian Watchdog on 12.09.13 at 10:50 pm

If you want to know which way the CAD is likely to move, watch oil prices and how high the BoC’s bond asset purchase program goes.
========================

This looks like really good info, and I get that CAD moves with oil. The part I haven’t grasped is how the ramping up in bond purchases drives the dollar. Are these purchases of Canadian govt bonds?

#102 James on 12.10.13 at 2:40 am

Ever hear of the bond market, son? — Garth

Ever hear of locking in for 10 years? It will take like 20 years for rate to normalize.

#103 Tom from Mississauga on 12.10.13 at 2:44 am

The way I’ve ‘shorted’ the Loonie is by owning the ETF ZSP. So Garth where is the best place to hold a US equity ETF? TFSA, non-registered or RRSP? I’ve got ZSP in the RRSP and ZUB for extra torque in the TFSA. How does it work in non-registered?

#104 Freedom First on 12.10.13 at 2:45 am

Luv this post Garth!

Great start, “basically, you’re all insane”. Then, a step by step illustration of why this is true. Perfection. Thank you Garth.

#105 Derek R on 12.10.13 at 2:48 am

#93 HDJ on 12.10.13 at 12:44 am wrote:
Seems to me those running our government and the banking system are indistinguishable. The government has given the banks what they want, and that’s how things will remain. Average Canadians, take a hike.

Maybe that explains why the UK has Zopa and the US has Prosper for peer-to-peer lending but Canada has no one. Yes, there’s Community Lend but it’s not the same. Too much of a threat to the Big Five? Doesn’t seem likely.

#106 Son of Ponzi on 12.10.13 at 3:37 am

My “not so wealthy barber” always tells me to go short.
But I have very little hair left.
Just like the Feds and the BoC are running out of bullets.
The time for haircuts is over.
Next we have to go for the scalp.

#107 Tony on 12.10.13 at 3:46 am

Interest rates will ratchet down in America not up. First, forth quarter growth will be anemic and second read this article about quantitative easy tripling next year.

http://www.marketoracle.co.uk/Article43438.html

#108 SmallTownTokenBrown on 12.10.13 at 3:46 am

Smoking Man,

“Finally I out a tree hugger,thought I lost my touch, of course it’s not, cause it’s getting f-n colder.”

I don’t think I’ve ever seen such confident idiocy in my life.

Tell me, are you hopelessly contrarian in other areas that have a fairly solid scientific consensus?

You’re the type of guy that tells 97 engineers they’re wrong but the 3 engineers that dropped out before 2nd year are your choice for the world’s strongest bridge right?

So 97 doctors tell you, it’s cancer, but 3 doctors tell you it’s just a general malaise and to take some sage of Myanmar and you choose the three doctors right?

You’re hopelessly contrarian when discussing a scientific topic. This might make for a good trading strategy, but shows vast levels of ignorance and arrogance when applied to a topic for which you seem to be pretty uneducated.

#109 World According To Garth on 12.10.13 at 3:48 am

Absolutely boggles the mind — just how STUPID our government is, and how STUPID Canadians are….believing the

——————————————————–

Wrong. Govt employees are not stupid at all. They just don’t give a crap about the taxpayer. They only care about their million dollar pensions and 91,000 dollar salaries. Everything they do is a big circle jerk less the good work the single digit percentage front line people do. And I don’t count the taser/gun shooting cops we have today who are too chicken to take someone down by hand like in the old days. Today they just shoot you.

#110 Sofaking on 12.10.13 at 5:34 am

#77 smokin’man

Wrong. Not a tree hugger. While you’re all asleep I work hard to make sure you stay warm at night.

ENSO, that’s what we’ve been telling the global warming freaks and they decided to change the name when they realised it might put a curve ball on their argument.

#111 PierrePoutain on 12.10.13 at 5:40 am

Mon dieu, anglophone Canada is in deep sh%#. Us smart francophones have, in contrast and thanks dieu, been super resposinsible. No housing bubble here in quebec! Viva la Quebec!

#112 Ky on 12.10.13 at 6:32 am

#50 says:

“Real estate market is the leased of my worries”

Nice unintentional pun….

#113 Bobby on 12.10.13 at 6:33 am

Shorting Canada or the Loonie this year may have it’s perils. Don’t forget the Conservatives have promised to Balance the budget in a year and return Canada to a surplus.

#114 Herb on 12.10.13 at 6:57 am

#65 Chickenlittle,

thanks for proving my point: you got activated. “Silly logic” indeed!

Questions for your objective, non-partisan self: What does “don’t like” have to do with partisan politics? What proves that Trudeau is an idiot – the fact that he’s not a Neandercon? And would Conservatives try to do a Dion and Ignatieff on him if he were not a threat?

#115 Catalyst on 12.10.13 at 8:42 am

Yesterday CNN reported US version of CMHC lowered its cap on mortgages it would qualify from $729K to $650K.

As long as CMHC will continue to guarantee $1M mortgages, this can continue to inflate for a while.

On the topic of your post, americans have never understood Canada and rational analysis from a 3rd party perspective will often not understand the level of RE sickness Canadians are striken with. No amount of debt/income, rising bips, increased property taxes, can shake these people who are making 50K a year in paper wealth. Some at work say their house makes more than they do every year so why would they quit their second job that requires no work?

#116 pbrasseur on 12.10.13 at 8:50 am

@PierrePoutain #111

“No housing bubble here in quebec! ”

Montreal RE market is tanking faster than Toronto or Vancouver!

Can’t decide if you are naive or just another idiot!

#117 HogtownIndebted on 12.10.13 at 9:00 am

Hmmm…Harper, Mulroney, Campbell and most of the neocon apparatchiks who have screwed up our economy are on the same plane, out of the country….

Anyone else thinking this would be a good time to lock and bolt the door shut?

And why the heck couldn’t they take F with them? He could have fit easily in the overhead storage compartment.

Unhappy? It’s a free country. Run for Parliament. — Garth

#118 Mark on 12.10.13 at 9:11 am

Shorting Canada – Really!

The economic downturn in the US was due to the bundling of bad mortgage derivatives, rated well by ratings agencies, car companies going bankrupt, a world wide recession, home owners being able to walk away from their mortgages, unavailability of credit, and so on…

This is not even close to happening now and won’t happen in Canada in our lives. The rules are different in Canada for homeowners and the World economy is on the mend. House sales may flounder, but it won’t tank the economy.

So, tell your Hedgy friend to go back to the US and invest in something there. There lots to invest in

#119 pbrasseur on 12.10.13 at 9:16 am

Shorting Canada?

By buying stocks of the best companies in the world, most of which happen to be listed not in Canada but rather in the US, I’ve been doing something that ressembles that.

I have not been doing it for that reason but was aware of it. The shorting part is beginning to payoff but I feel the “best” is yet to come… US it putting its house in order, we have not even started, this is a long term thing, Canada will decline relative to the US there is just no avoiding it.

I would not buy a “short Canada” hedge fund, but I would recommend using the strength of the $CAN to buy great assets in the US or elsewhere.

#120 jess on 12.10.13 at 9:26 am

192 Republic_of_Western_Canada

http://www.globalwitness.org/campaigns/corruption/oil-gas-and-mining/secret-sales/glencore
“Every year, oil, gas and mining companies make payments worth hundreds of billions of dollars to governments for access to the world’s natural resources, including taxes, royalties and license fees. In Africa, for example, these payments will be the largest inflow of wealth for the foreseeable future. In 2010, the value of exports of oil and minerals from Africa was worth $333 billion, about six times the value of exported agricultural products ($55 billion) and nearly seven times the value of international aid ($48 billion).”
But these payments are often made in secret, enabling corrupt officials to siphon off or misappropriate natural resource revenues.

http://www.globalwitness.org/campaigns/publish-what-you-pay

#121 Shawn on 12.10.13 at 9:41 am

How to Short Canada

100 Regretful asks:

Garth, how does one short Canada.

***********************************

Leave!

#122 frank le skank on 12.10.13 at 10:12 am

#38 Franco on 12.09.13 at 10:13 pm
#27 — Well Daisy Mae, many have called the demise of the Canadian RE market and so far none have come true. I have been steadily predicting the RE Market to stay strong for the last five years and I have been consistently correct. I now predict a slight correction, but only slight with a sideways RE market in Canada for a short while. Canada is growing and not shrinking.
=============================

No offence Franco, but saying that the RE market will stay strong is comparable to living next to a volcano saying that it won’t erupt. The challenge isn’t to predict the status quo, its to predict the inevitable eruption that is bound to happen. If you really want to impress people on this blog, why don’t you predict when your “slight correction” will happen? How long will it slide sideways? Not that it matters when its coming from an anonymous poster who’s never been seen on this blog before.

#123 Daisy Mae on 12.10.13 at 10:18 am

#38 Franco: “#27 — Well Daisy Mae, many have called the demise of the Canadian RE market and so far none have come true. I have been steadily predicting the RE Market to stay strong for the last five years and I have been consistently correct. I now predict a slight correction, but only slight with a sideways RE market in Canada for a short while. Canada is growing and not shrinking.”

********************

A realtor, right? And, a denier. :-)

#124 chickenlittle on 12.10.13 at 10:22 am

#114 Herb:

When I vote, I don’t necessarily have a party in mind. I vote for whoever has the best policies, etc.
The problem with voting is that you don’t know who will be elected and therefore appointed to any particular office.
I don’t know if JT is going to get the right people to run. THAT’S the problem: if I don’t respect his intelligence now, and a bunch of buffoons win for the liberals, who is he going to appoint to do what?
Either way, with either party, we all lose.

I hope this makes sense. I have the flu.

#125 Daisy Mae on 12.10.13 at 10:23 am

#41 Eddy: “The good stuff gets multiple offers and sells.”

*********************

Is that why crack shacks in Vancouver sell for 1.5k?

#126 Mr. Frugal on 12.10.13 at 10:28 am

For those of us that have been paying attention, the solution is quite simple. Open a US Margin account at a discount brokerage. Be sure to use Norbert’s Gambit to avoid excessive fees for currency conversion (i.e. Google this!!!). Then buy some U.S. ETFs (e.g. VTI) using US dollars. So, if the Canadian dollar drops, you make some extra coin. Easy!!!

#127 Steven on 12.10.13 at 10:35 am

When young people and first time home buyers see the price being asked for a property they should say to the vendors and realtors, “up yours!”
The next step is to do an extreme low ball offer and or walk away. It may seem rude but it is the only non violent way I can think of to send a message to those whose expectations and demands are out of line with common sense, decency and the real world.

#128 Obvious Truth on 12.10.13 at 10:42 am

I don’t hear anyone talking about gold anymore.

#129 Daisy Mae on 12.10.13 at 10:53 am

#75 Erick: “RE going down, CAD $ going down, then exports going up, and Canada finally going back to producing and selling real stuff – replacing jobs based on the dreams of people expecting to make easy money with condos…”

*****************

Yes, the pendulum always swings.

#130 Daisy Mae on 12.10.13 at 11:18 am

#109 World According To Garth: “Absolutely boggles the mind — just how STUPID our government is, and how STUPID Canadians are….believing the”

——————————————————–

Wrong. Govt employees are not stupid at all. They just don’t give a crap about the taxpayer.

*********************

Yes, true. But the greedy self-serving government decisions have all failed. Therefore, they were stupid decisions.

#131 Ret on 12.10.13 at 11:24 am

Hedge fund?
Could CMHC be involved??????

Big US bucks to soak up all those condo and mortgage defaults? Market goes up, these guys make money. Market goes down, these guys make money.

#132 Daisy Mae on 12.10.13 at 11:25 am

#113 Bobby: “Shorting Canada or the Loonie this year may have it’s perils. Don’t forget the Conservatives have promised to Balance the budget in a year and return Canada to a surplus.”

****************

Doesn’t the government have the ability to print money? Hasn’t Garth mentioned this on occasion? So, the feds will just keep on printing until the budget balances…. ;-)

#133 T.O. Bubble Boy on 12.10.13 at 11:30 am

More Mass Layoffs!
http://www.cbc.ca/news/business/kellogg-to-close-london-cereal-factory-next-year-1.2458080

Poor Southwestern Ontario… after all of the auto-related job losses, you get Heinz closing up shop in Leamington and now Kellogg in London.

#134 Daisy Mae on 12.10.13 at 11:31 am

Further to last…..

GARTH: “Of course the country’s not in trouble. It can always print money and raise taxes.

But you can’t.”

#135 Macrath on 12.10.13 at 11:34 am

#100 Regretful
How do I short a Country.
——————————–
Sell your RE and wait for the correction.

Borrow a pile of Canadian $ and invest them in foreign securities or bonds (unhedged to CDN $)

or like #119 pbrasseur says get some international exposure with your investments.(much less risk)

#121 Shawn- Leave! always an option but it would have to be to a third world country. In Europe your CDN $ won`t last long..

#136 HD on 12.10.13 at 11:38 am

@ #122 frank le skank on 12.10.13 at 10:12 am

Touché!

Best,

HD

#137 econimictsunami on 12.10.13 at 11:41 am

Tapering is perhaps not as significant as withdrawing excess liquidity of the WRC.

The Fed, when it does tighten extraordinary monetary policy will do so by a death of a thousand insignificant cuts.

As they do so, any combination of the PBOC, ECB or BOJ is sure to pick up the slack by increasing their contributions.

With presently $10,000,000,000,000 collectively on CBs balance sheets and global government stimulus unable to move the economic needle, to any sustainable extent, one has to wonder why a taper is even being considered?

Other then it is clearly an utter failure for the real economy but a genuine boost for inflation in certain asset classes…

Kellogg to close London, Ont., plant, lay off about 500 workers Add to …

http://www.theglobeandmail.com/report-on-business/kellogg-to-close-london-ont-plant-next-year/article15840106/#dashboard/follows/

#138 Timing is Everything on 12.10.13 at 11:52 am

Looks like Ontario will have to import Cornflakes starting next year so new home builders can keep building.

http://tinyurl.com/pakwbwz
http://tinyurl.com/p2mhx5d
——————————————-
#9 ILoveCharts

As ‘bad’ as Vancouver is, Toronto is worse. Ironically, too many ‘greenies’ in T.O.

#139 Joe Bloggs on 12.10.13 at 11:55 am

“… in anticipation of the US Fed starting its tapering ”

– LOL!!! It’s about time to wake up, Garth… Stop dreaming…

Read this. — Garth

#140 Smoking Man on 12.10.13 at 12:07 pm

http://www.breitbart.com/Big-Government/2013/12/10/Colorado-6-year-old-suspended-for-kissing-a-girl

6 year old suspended for kissing a girl on chek

The Schools…….

#141 CJ on 12.10.13 at 12:23 pm

If you keep calling for the bubble burst, some day it will happen. It’s hilarious hat we have been reading about the impending housing crash for years.
Keep talking about. You’re bound to be right some day.
Meanwhile, I will continue paying my mortgage for a $500,000 bungalow in Calgary that I absolutely love. I couldn’t care less what it’s worth in 20 years. It’s my home.

Re/Max and Royal LePage thank you. And, good luck. — Garth

#142 Godth on 12.10.13 at 12:34 pm

#108 SmallTownTokenBrown

Don’t get me wrong, it’s clear mother nature is going to spank us for our abuses but let’s stop abusing the word ‘science’ as well.

We have yet another case of modelitis I’m afraid. Economic ‘science’ deals in an ideal world scenario that calls a curved line straight, leaves out banks, debt and money nevermind the externalities of nature in their ‘models’.

Perhaps the ‘climate change’ models may want to include solar activity and undersea volcanoes in their ‘scientific’ models. Or they could try to work out how to improve longer term (more than 2 day) weather forecasts to better than 5% accuracy. ;)

Don’t get me started on cosmology where the vast majority of the universe is missing.

#143 Herb on 12.10.13 at 12:37 pm

#124 Chickenlittle,

makes a lot more sense than your last one.

#144 CJ on 12.10.13 at 12:37 pm

Thanks for the “well wishes” Garth. Why don’t we check back in 5 years to see whether I made the right decision? Or should it be 10 years? When is this crash happening again?

What crash? Just expect a painful, long-lived, dribbling away of your equity. – Garth

#145 Stickler on 12.10.13 at 12:39 pm

Unfortunately the talk of tapering, weather it actually happens or not, was enough to derail preferred shares, REITs, utilities and many high dividend payers.

Many experts say there will be a lot more downside to come as investors shed these shares for “growth” companies as taper talk resumes and or starts…

Because you know there is so much growth out there right…

Tips:
Take your CAD and invest in USD assets, conservative could be just exchange to USD, or more aggressive buy ZSP (as was all ready suggested be someone today).

Good luck.

#146 Steve on 12.10.13 at 12:40 pm

141 CJ on 12.10.13 at 12:23 pm
If you keep calling for the bubble burst, some day it will happen. It’s hilarious hat we have been reading about the impending housing crash for years.
Keep talking about. You’re bound to be right some day.
Meanwhile, I will continue paying my mortgage for a $500,000 bungalow in Calgary that I absolutely love. I couldn’t care less what it’s worth in 20 years. It’s my home.

Re/Max and Royal LePage thank you. And, good luck. — Garth
___________________________________________

Do you care what your net worth is in 20 years?

#147 sciencemonkey on 12.10.13 at 12:43 pm

@126 Mr Frugal
Looks like more options are becoming available for un-hedged international funds in CAD$. Not having to worry about currency conversion makes life easy. When I rebalance I’m looking at XEC for emerging markets, XEF for non-US equity, and VUN for US equity.

http://canadiancouchpotato.com/2013/08/16/inside-the-new-vanguard-etfs/

http://canadiancouchpotato.com/2013/04/15/new-ishares-etfs-give-canadians-the-world/

But keep in mind these 3 just hold a US-based ETF, so there are tax considerations.

http://canadiancouchpotato.com/2012/09/20/foreign-withholding-tax-which-fund-goes-where/

#148 heineken on 12.10.13 at 12:51 pm

#127 Steven on 12.10.13 at 10:35 am
When young people and first time home buyers see the price being asked for a property they should say to the vendors and realtors, “up yours!”
The next step is to do an extreme low ball offer and or walk away. It may seem rude but it is the only non violent way I can think of to send a message to those whose expectations and demands are out of line with common sense, decency and the real world.
—————————————————-
lets all hold hands and sing “praise the lord” and pray for tinker bell to wave her magic wand and make the world so beautiful and perfect for “all the young people and first time buyers”.
have you had a starbucks coffee yet.

#149 Suede on 12.10.13 at 12:53 pm

Coldest Temperature Ever Recorded on Earth yesterday!

So much for Global Warming…

http://www.usatoday.com/story/weather/2013/12/10/antarctica-cold-record/3950019/

#150 heineken on 12.10.13 at 12:57 pm

#140 Smoking Man on 12.10.13 at 12:07 pm
6 year old suspended for kissing a girl on chek

—————————————————-
most people just don’t get it.
they don’t see that black is white , and evil is good, war is peace, freedom is slavery ……….. etc.
george orwell has a lot of great quotes that see into the future. heres one of my favourites that detail govt. im sure you will enjoy it.
Political language… is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.

#151 skybluepink on 12.10.13 at 1:07 pm

#47 not 1st on 12.09.13 at 10:37 pm
“Your five-year mortgage renewal cycle is a disaster”
—-

You mean just like the ARM cycle in the U.S.A has been?

ARMs will adjust after 2 or 3 years, typically. That’s about as much risk as the average American will take. Instead we have VRM which could adjust the moment you walk out of the bank after signing.

This is a game of hot potato just waiting for the music to end!

#152 heineken on 12.10.13 at 1:08 pm

here’s another reason you should not have your money in banks.
its just the beginning
http://www.ibtimes.com/jpmorgan-chase-cyberattack-almost-half-million-corporate-customers-data-breached-bank-warns-1496346

Newsflash: we live in Canada. — Garth

#153 skybluepink on 12.10.13 at 1:11 pm

All it for the US market to start the dominion effect was the “credit crunch”. No increase in rates they just weren’t lending anymore.

#154 Fed-up on 12.10.13 at 1:12 pm

@#149 Suede on 12.10.13 at 12:53 pm
Coldest Temperature Ever Recorded on Earth yesterday!

So much for Global Warming…

http://www.usatoday.com/story/weather/2013/12/10/antarctica-cold-record/3950019/

—————————————————————————-

Ahhh but they now call it “Climate Change”. See how easy it is?

#155 TS on 12.10.13 at 1:22 pm

“That,” says the hedger, “looks like a no-brainer.”

So, he reads this blog. “Can’t believe how many posting there are in denial,” he offers. “The situation here is actually far worse than it was in the US in 2006 or 2007. We just find it hard to believe people in Canada watched what happened to us five years ago and figured they were immune.”

Saying this will become a brainer?

#156 Derek R on 12.10.13 at 1:37 pm

#149 Suede on 12.10.13 at 12:53 pm wrote:
Coldest Temperature Ever Recorded on Earth yesterday!

So much for Global Warming…

Global warming theory says that the average temperature will rise and that we will get more more extreme weather: colder cold spells, hotter heatwaves, stronger winds, fiercer storms, bigger floods, longer droughts.

Are you saying that it’s actually happening or not? You’re first sentence seems to say “Yes” but your second one seems to say “No”. You’re confusing me.

#157 Tony from Calgary on 12.10.13 at 1:42 pm

Newsflash: we live in Canada. — Garth

Or in other words, “It’s different here”.

Glad to see that, like QE, the hypocrisy here has not yet tapered either.

/sarc

Cheers,
TFC

Actually your link had zero to do with Canadians. Tyr harder to be a prick. It’s not working. — Garth

#158 Bottoms_Up on 12.10.13 at 1:42 pm

#149 Suede on 12.10.13 at 12:53 pm
——————————————–
The overall global trend is a warming trend, but it indeed is now referred to as ‘climate change’, as some places will get hotter while others colder. Some will get more rain, and some, much, much less. Think of climate change as ‘Russian roulette’….and if we have the ability to stop this dangerous game, shouldn’t we try?

#159 big fan of this pathetic blog on 12.10.13 at 1:43 pm

What’s your comment on this article, Garth?

http://www.cbc.ca/news/business/why-the-financial-system-s-fairness-matters-amanda-lang-1.2457017

She looks hot. — Garth

#160 recharts on 12.10.13 at 1:45 pm

Unhappy? It’s a free country. Run for Parliament. — Garth

“Learn from the mistakes of others. You can’t live long enough to make them all yourself. ”☺

#161 Outsourced !!! on 12.10.13 at 1:57 pm

London, ON just lost 500 more jobs, thanks Unions and Fontana. Kellogs plant is closing down and a new one is being build in Thailand.

Our politicians should wake up, there will be no more people voting as they would move to where the jobs are.

#162 Bottoms_Up on 12.10.13 at 1:57 pm

#137 econimictsunami on 12.10.13 at 11:41 am
————————————————
Witnessing this tsunami of Ontario job loss is astonishing and saddening to say the least. When will our leaders lead (government and private sector included), and stop this economic bleeding out???

To government leaders: we, the taxpayer, look to you to provide steady stewardship with respect to maintaining and enhancing a functioning economy.

To private sector leaders: when your customers are left without jobs, whom will buy your products?

#163 recharts on 12.10.13 at 1:58 pm

the genius who invented Bitcoins made one mistake: he did not register a patent for that.

Now… look what is happening:

http://www.zerohedge.com/news/2013-12-10/chasing-bitcoin-jpm-preparing-unveil-its-own-electronic-currency

#164 Bottoms_Up on 12.10.13 at 2:02 pm

#111 PierrePoutain on 12.10.13 at 5:40 am
———————————————
you also make 10-20% less living in quebec (higher taxes). therefore, you too, indeed, live in a housing bubble. it’s just the goal posts are lower for you.

#165 Dupchek on 12.10.13 at 2:10 pm

South Western ON plant closures in the past two years:

Ford Plant. St. Thomas
Caterpillar. London
Diamond
Fram
Smucker’s
Heinz. Leamington
Kelloggs. London

And we are still building brand new homes that cost north of $350,000. Who is going to buy them? We should worry about people moving away since there are no jobs.

#166 Godth on 12.10.13 at 2:15 pm

157 Bottoms_Up

Vaclav Smil – Drivers of environmental change
http://www.youtube.com/watch?v=nJxmlNyu4sE

#167 Dan on 12.10.13 at 2:21 pm

One turn of the screw
http://www.lfpress.com/2013/12/10/hundreds-losing-jobs-as-kelloggs-closing-london-plant

#168 Herb on 12.10.13 at 2:25 pm

#165 Dupcheck,

and the lying, taxing, tree-hugging Liberal Government of Ontario is responsible for every single one of those, right Smoking Man?

#169 Smoking Man on 12.10.13 at 2:38 pm

#168 Herb on 12.10.13 at 2:25 pm

and the lying, taxing, tree-hugging Liberal Government of Ontario is responsible for every single one of those, right Smoking Man?
………………………
Every single one. more on the way, that new recycle bill they are pushing will devisate the food industry and producers.

we have free trade with usa ,going to look at buying some industiral land or buildings in NF new york.

ontario business will moving there.

#170 Blacksheep on 12.10.13 at 2:42 pm

“Unhappy? It’s a free country. Run for Parliament. — Garth”
————————————————–
Garth, you kill me, that is the funniest thing I’ve read in a while : )

That ranks right up there with these gems of wisdom:
“If you didn’t vote, you have no right to complain” or
“Our Grandfathers sacrificed their lives so you have the right to vote” And of course this tidbit of insanity,
“Voting should be made mandatory”

Like any religion, the application of guilt, only works on the Cattle, whom truly believe.

So, you’d rather complain and be ignored? That’s easy. — Garth

#171 Penny Henny on 12.10.13 at 2:58 pm

#139 Joe Bloggs on 12.10.13 at 11:55 am
“… in anticipation of the US Fed starting its tapering ”

– LOL!!! It’s about time to wake up, Garth… Stop dreaming…

Read this. — Garth
————————————————–
you can have tapering and still have QE 4ever, no way anyone can say with any certainty that they will taper all the way down to zero.

#172 no longer a fan of this pathetic blog on 12.10.13 at 3:06 pm

Thanks for you answer to my query.

“She’s hot” tells me lots. It really does.

I think you need to lighten up. Any ‘journalist’ who runs a column with a picture like that, as big as that, tells you a lot. It really does. — Garth

#173 Dual Citizen in Canada on 12.10.13 at 3:07 pm

I am indebted to the knowledge shared in this blog. The only debt I should ever carry in my lifetime!

#174 Old Man on 12.10.13 at 3:22 pm

Well, nothing new here about the demise of Ontario as gave you the clues with the K Project, as knew well in advance about the closing of Kelloggs, but you were not paying attention. The same with H.J. Heinz months in advance, and you are pointing the wrong finger at Buffett, as he is a passive investor and is making no decisions. The show is being run by Lemann with his amigos from Brazil. Now there is a big difference between a privately owned company versus a public one with thousands of shareholders; well let you ponder that one a bit. The bottom line is cashflow for the least cost moving forward, so welcome to the new world of globalization.

#175 Porsche on 12.10.13 at 3:23 pm

BofA Merrill Lynch: Prepare for a 20% correction next year

http://finance.yahoo.com/blogs/talking-numbers/bofa-merrill-lynch-prepare-20-correction-next-152010397.html

#176 gladiator on 12.10.13 at 3:55 pm

Indeed, “climate change” is the new “global warming”.
But fighting climate change is like fighting water evaporation – it happened, happens and will happen with or without us, and even (gasp!) on other planets!

#177 heineken on 12.10.13 at 4:02 pm

#174 Old Man on 12.10.13 at 3:22 pm
Well, nothing new here about the demise of Ontario as gave you the clues with the K Project, as knew well in advance about the closing of Kelloggs, but you were not paying attention. The same with H.J. Heinz months in advance, and you are pointing the wrong finger at Buffett, as he is a passive investor and is making no decisions. The show is being run by Lemann with his amigos from Brazil. Now there is a big difference between a privately owned company versus a public one with thousands of shareholders; well let you ponder that one a bit. The bottom line is cashflow for the least cost moving forward, so welcome to the new world of globalization.
—————————————————————-

i wont give you an argument- your dead on.

forget about learning french or spanish. if you want to communicate with your new masters, learn madarin.

#178 Blacksheep on 12.10.13 at 4:04 pm

So, you’d rather complain and be ignored? That’s easy. — Garth
———————————————
Yes please. Merely observations shared with a select few, heathen dogs.

Rumour has it, It’s a free country :)

#179 Canadian Watchdog on 12.10.13 at 4:05 pm

#165 Dupchek

That's what happens when socialists start peeping the words "minimum" and "wages".

Minimum Wage Advisory Panel December 2013

The Ontario government has appointed an advisory panel to give advice on the province’s minimum wage.

The advisory panel will examine Ontario’s current approach to setting the minimum wage and provide advice on how the province should determine changes to the minimum wage in the future.

The panel has representation from a diverse group of members from business, worker, labour, and youth representatives.

The chair of the panel will report back to the government with recommendations within six months of the date the 2013 Provincial budget was passed. Under the Terms of Reference for the panel the time period can be extended by the Minister of Labour by up to 3 months.

Addressing the minimum wage is a key part of the Ontario government’s strategy to build a stronger economy, a more prosperous province and help the most vulnerable.

Ontario Minimum Wages 1965-2013 – Chart

Same ol' confiscation revenue scheme as always: increase minimum wages to push workers into a higher tax bracket. Works every time.

#180 Nemesis on 12.10.13 at 4:12 pm

ThematicallySpeaking, SaltyDogz… today’s LeaderZen is a NoBrainer…

Hint: UncleVlad’s PayingUsAVisitSoon – although oddly, his plans do not appear to include shopping for VancouverSpecials…

[RT] – Putin orders Arctic military build-up in 2014

http://rt.com/news/arctic-russia-military-putin-000/

… No worries though, as NuclearIcebreakers like the Taimyr or the BattleCruiser Pyotr Veliky are, like, so cumbersome and unwieldy vs. BlazingSnowMobiles… and Hey!… how about those CanadianRangers, eh!…

[CTV] – Canadian Rangers in Meaford for week-long training session

http://barrie.ctvnews.ca/canadian-rangers-in-meaford-for-week-long-training-session-1.1572983

[NoteToDND: Red baseball caps? RootsFleecies? Seriously? NoteToDogz: Nem is not making fun of the Rangers… he’d just like to see them properly KittedOut and resourced.]

Oh yes, speaking of VancouverSpecials… HeritageDogz are advised to GoCoastal sooner vs. later… as what little Vancouver HeritageRemains is VanishingFaster than ArcticIcePacks….

[Tyee] – Portrait of Vancouver’s Vanishing Character Homes

…”As of the end of October this year, 704 homes were demolished in this city. At this rate of 70 houses demolished per month, by the end of the year we will have sent around 850 to the Delta DLC landfill, which is currently comprised of 74 per cent residential demolition waste.

Delay action for a year, and we will be down another 850, by which point city staff may be hard pressed to find a “concentration” of character homes. I’m not exaggerating. The street next to mine has one original house on the south side. The next street has no remaining original houses on that side.” – Caroline Adderson

http://www.thetyee.ca/Opinion/2013/12/10/Vancouver-Vanishes/

…which must be why TheNatives are GettingRestless… and TheCivicPoliticos are RunningScared:

[G&M] – Vancouver’s political landscape shifting ahead of election season

…”a host of small, new parties on various parts of the political spectrum are all hoping to capitalize on public opposition to the second-term Vision Vancouver council over bike lanes, development, community centres and more.

That is likely to mean voters who have been steady supporters of one party or another are bound to feel the ground – and possibly their loyalties – shifting over the next 11 months.”…

http://www.theglobeandmail.com/news/british-columbia/vancouvers-political-landscape-shifting-ahead-of-election-season/article15835209/

Hmmm… funny that, the way things are shaping up at City Hall these days, could Vancouver councilors be blamed for wishing they were in actually in NoooJoizey?…

[UK Independent] – Man only noticed knife in his back after a good night’s sleep, police say

…”A man in the US has told police he was stabbed during a fight on Saturday night – but did not realise there was a knife in his back until it was pointed out on Sunday.

The 42-year-old from Trenton, New Jersey said he managed to get an undisturbed 10 hours of sleep before his brother informed him he had a 5-inch blade poking out of his torso.”…

http://www.independent.co.uk/news/world/americas/stab-victim-only-noticed-knife-in-his-back-after-a-good-nights-sleep-police-say-8995120.html

… Still, could’a been, like… WayWorse!… What if he’d tangled with an EeeenglishGranny?….

“I went for my walking stick and said ‘I’m going to break your kneecaps, you’re not going to get away'” – Margaret Woodward

[BBC] – Burglar-chasing pensioner Margaret Woodward rewarded

http://www.bbc.co.uk/news/uk-england-derbyshire-25314545

Well. There it is.

[NoteToSaltyDogz: Now you know why Politicos are terrified by TheWrinklies.]

#181 Blacksheep on 12.10.13 at 4:13 pm

Smoking Man,

Your USC collector thingy is giving you bad Intel again.

Your (and others) getting sucked in with this whole left / right / other / distraction.
I mean you gotta know, the ornament on the hood may change every few years, but the fundamental direction of the vehicle (dictated by the ‘system’) remains the same.
We will get: National carbon taxes, when the Cattle have been sufficiently marinated, with the appropriate propaganda, regardless of the leanings of whomever is in power.

Do you NOT believe this long planned ‘Green Taxation’ will be applied to all first world nations? No hablo, central banking? You can run, but you can’t hide.

To escape one tax farm, you must enter another.

#182 World According To Garth on 12.10.13 at 4:29 pm

You just keep telling yourself that as we move into a mini ice age the WORLD over sunshine. Try doing your own research on GLOBAL record cold temperatures happening every year now.

You know how they know aliens/ufos in Enlgland are real? Because it was so cold two years ago at the SUMMER Olympics that there was rain and mud in the fields where the crop circles were and there were NO college kid foot prints. Look it up.

Finally……CO2 is food for plants. I learned that in grade three but it seems all the dumbass govt workers and greenies did not graduate elementary skkooool. Increased CO2 would actually be good for the planet if it were actually happening…..not.

——————————————————————

#158 Bottoms_Up on 12.10.13 at 1:42 pm
#149 Suede on 12.10.13 at 12:53 pm
——————————————–
The overall global trend is a warming trend, but it indeed is now referred to as ‘climate change’, as some places will get hotter while others colder. Some will get more rain, and some, much, much less. Think of climate change as ‘Russian roulette’….and if we have the ability to stop this dangerous game, shouldn’t we try?

#183 bentoverandpayingmytaxes on 12.10.13 at 4:51 pm

Woops… I did it again…..is what premier wynne must be saying as another Ontario food job giant shutters is operation…..Kellogs is now gone….Heinz closed the doors last week…who’s next?

Way to go Liberal Party……the whole economy thing just goes right over your heads….right? Oh…I get it…..raise taxes..that’ll do it.

#184 Nemesis on 12.10.13 at 5:10 pm

BonusZen:

Whatever else one might be tempted to say about Mitt Romney, he clearly knows GoodKit when he sees it…

[TheStar] – Canada Goose sells majority stake to U.S. private equity firm

…”Canada Goose, one of the world’s leading makers of extreme weather outerwear, is selling a majority stake in the company to U.S. private investment firm Bain Capital.

Financial terms of the deal were not disclosed by Canada Goose, which said it was making the move in order to accelerate global growth.”…

http://www.thestar.com/business/2013/12/10/canada_goose_sells_majority_stake_to_bain_capital.html

#185 Tony on 12.10.13 at 5:15 pm

Re: #175 Porsche on 12.10.13 at 3:23 pm

It’s impossible to get a correction in a market that can only do one thing and that’s crash. Odds of a crash 100 percent. Odds of a correction 0 percent. That about sums it up.

#186 Son of Ponzi on 12.10.13 at 5:20 pm

“They don’t make any more land”. BS
The icecap is melting and Canada is claiming the North Pole.
Yeah, Santa is Canadian, but he’s willing to sell his stake of the Pole to any offshore developer.
That’s how crazy it is.

#187 Mike in Surrey on 12.10.13 at 5:26 pm

#144 CJ … Just expect a painful, long-lived, dribbling away of your equity. – Garth. Agree, and I brought 4 new cars for a total of $135,000 since 1995, the one I’m driving only has a residual value of $25,000. That’s like dribbling away $6,000 equity every year. Is losing equity in your house more painful or your car?

Did you put the bulk of your net worth there? — Garth

#188 An Cat Dubh on 12.10.13 at 5:27 pm

Lots of homes for sale in Penticton. BTW, BC Hydro which made a 500 million profit last year is raising it power rates over the next 5 years. The money goes into general revenue. BC has had some of the highest hidden tax increases in the last 10 years. They have low personal income taxes, which doesn’t mean much when you work for most Okanagan employers.

#189 An Cat Dubh on 12.10.13 at 5:29 pm

“They don’t make any more land”. BS
The icecap is melting and Canada is claiming the North Pole.
Yeah, Santa is Canadian, but he’s willing to sell his stake of the Pole to any offshore developer.
That’s how crazy it is.

That is the equivalant of the Beaver poking the Bear with a pointed stick.

#190 Arthur Goldsmith on 12.10.13 at 5:50 pm

It may not be good form to ask for investment timing, but I am curious about how the hedge fund is trying to time their shorts; shorts are all about timing!

#191 GUY GADBOIS on 12.10.13 at 5:54 pm

so, the housing crash in Canada will be for 2014. Finally!

What crash? — Garth

#192 Canadian Watchdog on 12.10.13 at 6:02 pm

#184 Nemesis

Sold out. Now it’s only matter of time before Canada Goose heads south to be tagged with a “Made in Mexico” label.

#193 CrackHead Conservatives on 12.10.13 at 6:09 pm

Thanks to the CRACK head conservative and their giving away $600,000,000,000.00 to banks for sub-prime loans workers demand high wages to pay for their overvalued houses and US company say we will close down and goto 50% cheaper wages and houses USA. Good job you crack smoking crackservatives.

#194 rosie "moving forward" in the knowledge that, "this won't end well" on 12.10.13 at 6:16 pm

#179
If you bothered to check you would see that the minimum wage is less than it was in 1965 dollars.

http://www.coinnews.net/tools/cpi-inflation-calculator/#

#195 James on 12.10.13 at 6:18 pm

Just expect a painful, long-lived, dribbling away of your equity. – Garth

Stop exaggerating Garth. The recovery will be just as swift. What is 5-10% in the grand scheme of things…

You hope. — Garth

#196 CrackHead Conservatives on 12.10.13 at 6:18 pm

Outsourced !!! on 12.10.13 at 1:57 pm
London, ON just lost 500 more jobs, thanks Unions and Fontana. Kellogs plant is closing down and a new one is being build in Thailand.

Our politicians should wake up, there will be no more people voting as they would move to where the jobs are.
—————————————————————–

Nothing to do with unions. Workers in Canada can not work for $10 and afford a $400K house. High housing prices thanks to the CRACKHEAD CRACKSERVATIVES and their giving away $600,000,000,000.00 in sub-prime mortgages. The crack heads have ruined Canada. Good job crackheads.

#197 CrackHead Conservatives on 12.10.13 at 6:20 pm

127 Steven on 12.10.13 at 10:35 am
When young people and first time home buyers see the price being asked for a property they should say to the vendors and realtors, “up yours!”
The next step is to do an extreme low ball offer and or walk away. It may seem rude but it is the only non violent way I can think of to send a message to those whose expectations and demands are out of line with common sense, decency and the real world.
—————————————————————–
Crackhead realtors and mortgage brokers and other vested interests don’t want the masses to understand this simple tactic .

#198 broadway skytrain on 12.10.13 at 6:34 pm

jeez, give it a rest crackerboy.

try to state your points in a more dignified manner, you’ll win more converts.

#199 X on 12.10.13 at 6:42 pm

If the propaganda that the RE boards released were regulated, F probably wouldn’t have to tinker much with rules and regulations for housing. They would be fined for releasing misleading information, and/or media outlets could be as well.

It really isn’t fair for the sheep to be led to slaughter as they are. They have no clue that you can rent the same place for less than to buy it. Or that RE isn’t the great investment that they are led to believe as they are fed misinformation.

At least let the stats speak for themselves and have the RE boards release conditional solds in comparison with the conditional solds of the same period the previous year.

#200 NorthOf49 on 12.10.13 at 6:43 pm

#172 no longer a fan of this pathetic blog on 12.10.13 at 3:06 pm

Thanks for you answer to my query.

“She’s hot” tells me lots. It really does.

I think you need to lighten up. Any ‘journalist’ who runs a column with a picture like that, as big as that, tells you a lot. It really does. — Garth
——————————————————

Agree with Garth on this one. In Amanda’s own words :

“I bought the clothes that kept me in fashion in cutting-edge New York.”

Hotness indeed!

http://www.thestar.com/business/personal_finance/spending_saving/2011/06/05/i_broke_the_rules_to_spend_beyond_my_means.html

#201 Old Man on 12.10.13 at 6:43 pm

I pulled off another coup today, as have a large holding with BCE, so hit the phone and had a discussion with a lady for 30 minutes, as have a deadline with Rogers on December 17th. I will no longer pay $1,800.00 a year for TV and Internet, so the first thing she did was to cut my phone bill in half, as was paying too much based on my records, as that was a screw up. Then she asked me many questions to adjust my situation and they are coming on 14th at no charge to fix all for great savings with the TV and Internet, and sent me an email documenting this all which Rogers sent into my junk file that found with my relay system.

Now this was nasty, but am getting a great deal, as am fed up being ripped off in life, and she said do not pay that billing on the 17th as kick them under the bus and how do you want to pay? I said rig it monthly with the TD, and all will be well. You will never believe the deal that they gave me in writing.

#202 TurnerNation on 12.10.13 at 6:48 pm

House lickers took a licking.

….

By James Langton | December 09, 2013 16:30

The Ontario Securities Commission (OSC) has charged a couple with alleged quasi-criminal securities law violations.

The OSC announced today that it has charged a Vaughn, Ont. couple, Naida Allarde-Giangrosso and Bernardo Giangrosso, with one count each of trading without registration and one count of trading in securities when they were prohibited from trading by an OSC order.

The charges come in the wake of an investigation by the OSC’s new Joint Serious Offences Team (JSOT), and relate to their alleged roles in promoting the sale of syndicated mortgages to investors through a company known as Starboard View Homes, the OSC said.

The allegations have not been proven. Their first court appearance is scheduled to take place January 15, 2014, in Toronto

#203 Son of Ponzi on 12.10.13 at 6:48 pm

#189
Santa vs. Putin.
No contest.

#204 TurnerNation on 12.10.13 at 6:58 pm

Appears Ontario is taking a “Big Bath” loss in jobs this year. So, we’ll be clamouring for Door #2 next election. Behind it is Tim Who-dat, a mini-H. As is Ford.
See they’ll get their CON trifecta in Ontario after all. How the game is played.

#205 screwed on 12.10.13 at 7:16 pm

#121 Shawn – how to short Canada – “leave”

Yup. And put money into the hedge fund that’s shorting Canada. Hedgies were successful in destroying many other currencies and economies before. If they put enough ammo into this process, the Loonie and our bonds are toast.

Unless the BoC is supporting the cheap debt like the Fed, this country is ripe for a picking. The rich Canucks will play this game themselves.

Middle class self employed idiots like myself can only lose. Better leave now before the shit hits the fan.

#206 James on 12.10.13 at 7:16 pm

You hope. — Garth

I live in a SFH in forrest hill. It’s a fact.

Can’t be so sure if one lives in a condo.

#207 Doug in Toronto, usually in London on 12.10.13 at 7:50 pm

@Dupcheck, post #165:
I’ve been wondering the same thing. For many years I’ve seen these extra large houses going up all around the edge of London, and wonder who’s buying them. This latest news with Kelloggs further reinforces why I am glad to be mobile.

“We just find it hard to believe people in Canada watched what happened to us five years ago and figured they were immune.”
I find that puzzling also but a lot of people I talk to, especially around Toronto, think demand (and thus prices) will just keep going up. As I have said before, is there ANYONE left in the world who remembers the housing bust of the 1990s?

#208 Cow Man on 12.10.13 at 8:06 pm

Amigos:
First Heintz in Aylmer, and now Kelloggs in London. In total over 1100 jobs. You don’t think that the 30% increase in Electricity rates that Dalton gave us, to be green, has anything to do with do you? Thanks Dalton.

#209 Chupakabra on 12.10.13 at 8:09 pm

Hey Garth, terribly interested in that hedge fund for shorting Canada’s real estate economy. I remember reading a neat article a few years back about some smart investor dude who did something similar in the states back in 05/06, but he kept it private. Made shit tonnes of money. Yes, that’s a technical term.

Would you please be a dear and let us know when your friend’s fund is ready for retail investors? Not smart enough to set something like this up myself, and don’t have the critical mass of cash either. But I can see the writing on the wall, and I’m young enough to be very aggressive with my investments. And I’m probably not the only one here interested in this sort of thing.

#210 lawgirl on 12.10.13 at 8:15 pm

#117 I was thinking the same thing Hogtown. Send all the politicians on a plane to nowhere as far as I’m concerned. It’s nice to have our country with that idiot Harper not around. And Mulroney stole from us all and should be indicted.

And Garth, your suggestion that anyone complaining should run for office is a bit snarky.

After all, didn’t you run FROM parliament!?

You are proof that’s not the only way to get involved to seek change :)

#211 Dan on 12.10.13 at 8:55 pm

Garth
You are getting later and later with this blog I may cancel my subscription and demand a refund!
Oh.? It’s free
Never Mind lol

#212 Canadian Watchdog on 12.10.13 at 9:00 pm

#194

It's a pretty stupid idea to hike minimum wage when household balance sheets are on the brink. This will only force private sector companies to fire workers or relocate out of Canada, leaving many with no income at all.

Wynne and the tree huggers are leading Ontario over a fisical cliff. They don't get it and never will.

#213 Daisy Mae on 12.10.13 at 9:12 pm

#207 Doug: “We just find it hard to believe people in Canada watched what happened to us five years ago and figured they were immune.”
I find that puzzling also but a lot of people I talk to, especially around Toronto, think demand (and thus prices) will just keep going up.

******************

So….we’re not learning a thing?

#214 Daisy Mae on 12.10.13 at 9:21 pm

Cow Man: “Amigos: First Heinz in Aylmer, and now Kelloggs in London. In total over 1100 jobs. You don’t think that the 30% increase in Electricity rates that Dalton gave us, to be green, has anything to do with do you? Thanks Dalton.”

*********************

Nah…just adds to the pain. Those electricity increases are being felt across Canada.

#215 Old Man on 12.10.13 at 9:39 pm

#208 Cow Man – I know the inside and the hydro rates are not the issue, as Kelloggs in Belleville has spent about $140 million in the past 5 years with state of the art energy equipment. Now with H.J. Heinz they were ahead of all in Leamington with sophisticated energy retrieval that sold back into the hydro grid. No the real problem was high wages and benefit packages that could no longer go on, so the unions had to be taken down will no negotiations, but a closure.

#216 TurnerNation on 12.10.13 at 9:52 pm

Old man we assumed K is for Kia. No idea what lies outside of GTA.

#217 Old Man on 12.10.13 at 11:01 pm

#216 TurnerNation – get with the agenda about Project K, as did you not see that my Party Home was kicked under the bus with a corporate break lease that took place in October? I guess you too missed the clues, and was not paying attention. Imao, as knew Kelloggs was going down weeks before the big annoucment.

#218 bentoverand payingmytaxes on 12.11.13 at 1:28 am

Todays flight from Vanc to DFW was as usual full of Canadas best and brighest headed off to the wild west of Dallas to work because there are no jobs in Canada. These are all the best managers, best educated and talented Canada has to offer….leaving…..duh.

The same flights are full day afte day with Canadians getting out……there is plenty of jobs south of the border for higher educated specialties…US immi welcomes us…..literally with TN visas…..and a big smile…they know we’re paying big taxes….in the US.

Instead how does Canada compete…..they raise taxes….allocate jobs to new immgrants….focus on the public service instead of private…..tax and regulated the small/medium/large businessman out of existence…….yup…thats a recipie for success all right.

I’m damed happy to be down in Texas…..no way you can live this well in Canada without a fat civil service income. How can anyone talk down to Thailand …when overpaying union and civil services is causing the direct loss of jobs here in Canada? The cost of living is one tenth in Thailand….I have lived for years at a time in the past….people are not miserable generally. A couple making $20 per day actually have a decent life….a nice apartment costs $150-200 per month….compare apples with apples. Who is smarter…Thailand for keeping the civic servant greed in check…or Canada where it is out of control?

How do we justify our Vancouver police chief making $314,000 per annum…when the chief of NYC makes $200,000/ Why do those in the mayors office make $360K+++ when the Prime Minister makes half of that? How does a sky train cop make $200 p/a……andcity workers six figures on average ….etc ad nauseum…….taxes are going through the roof to pay the elite….causing job loss due to factory closing…due to ever ecalating taxes…to pay ever greedier civic service wages….its a vicious death spiral…when will it end?

I foresee either 100% taxation…or revolution…..the Ukraine is just an example of what happens when the elite go too far….Canada is getting to be an angrier and more stressed out country all the time……politicians shouldn’t assume that the sheeple are always going to stay that way forever. Meawhile the flood of Canadian talent spills across the border leaving only the lesser minds of the civil service to male things worse.

#219 Ozy - British poster: Keep Calm and Carry On on 12.11.13 at 5:42 pm

Keep Calm and Carry On

AKA

Buy in Scarborough at super affordable prices – lol
Let me detail

What, is the post-colonial exploitation system at risk?

Nah, Garth is such an war mongrel aka alarmist…

The indebted British govt and central bang will save Kanata – as Kanata saved Britain in two wars, didn’t…

Carney is coming back once gets the new financial weapons from MI5, watch out for a bottom under prices :) I think basically Garth is saying between lines: Wait don’t buy now in Toronto. Parts of it like Scarborough will get so much affordable. Do you agree?

just wait to see the inflation and megainflation of govt programs they have in LABORATORY already – Garth knows probably but can’t say without jeopardizing wiki leak sources

maybe he is a secret weapon too – well he stopped the real estate buying party, ok, orgy from reaching crash level for 5 years now.
So this is how is done in an inflationary environment, with many buyers without enough product to buy. Line ups and open bidding would have been more moral.

I repeat, Scarborough is a nice part of amazing city of Toronto and it welcomes you with open arms. Also Etobicoke north, what a breeze…

http://en.wikipedia.org/wiki/Keep_Calm_and_Carry_On

#220 Blacksheep on 12.12.13 at 11:49 am

“Smoking Man,

I’ve been trying to follow in the footsteps of your genius, but I can’t figure out how the Ontario Liberals managed to screw up Canada Post. Oh, wait … it’s a Crown Corporation responsible to the Federal Government, which is owned by the Conservatives.”

“So how do opposite ends of the ideological spectrum achieve the same results?”
————————————————-
Herb, this is easily explained. I ‘chirped’ Smoking Man with this recently, but he ‘missed’ it. Here’s a repost just for him.
————————————————-
S.M.

Your USC collector thingy is giving you bad Intel again.

Your (and others) getting sucked in with this whole left / right / other / distraction.
I mean you gotta know, the ornament on the hood may change every few years, but the fundamental direction of the vehicle (dictated by the ‘system’) remains the same.
We will get: National carbon taxes, when the Cattle have been sufficiently marinated, with the appropriate propaganda, regardless of the leanings of whomever is in power.
Do you NOT believe this long planned ‘Green Taxation’ will be applied to all first world nations? No hablo, central banking? You can run, but you can’t hide.

To escape one tax farm, you must enter another.